Basel Committee on Banking Supervision Endorses Revised Basel III Liquidity Standards for Banks

more+
less-

It was announced on January 6, that the Basel Committee on Banking Supervision’s (BCBS) Group of Governors and Heads of Supervision (GHOS) has endorsed revised Basel III liquidity standards for banks. This was later welcomed in a statement made by Michael Barnier of the European Commission on January 8.

The revised liquidity standards relate to the formulation of liquidity coverage ratio (LCR), which is an essential part of the reforms being made by Basel III. The package of amendments, which is summarised in a document headed Annex 1, comprises of four elements as follows:

    • revisions to the definition of high quality liquid assets and net cash outflows;
    • a timetable for phasing in the standard;
    • a reaffirmation of the usability of the stock of liquid assets in periods of stress (including during the transition period); and
    • an agreement that the Basel Committee will conduct further work on the interaction between the LCR and the provision of Central Bank Facilities.

In addition to the revised liquidity standards, the GHOS also reiterated the importance of full and timely implementation of the Basel III standards. It also endorsed a new charter for the BCBS in order to enhance understanding of its activities and decision-making processes, and identified that a review of the net stable funding ratio would also be a priority over the next few years.

 

Topics:  Basel Committee, Basel III, Commercial Paper, Covered Bonds, Debt, EU, Liquidity Coverage Ratio, RMBS

Published In: Administrative Agency Updates, Finance & Banking Updates, International Trade Updates, Securities Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Orrick - Structured Finance Group | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »